Defence Minister Manohar Parrikar on Saturday announced the government's decision to implement One Rank, One Pension scheme. At the press conference, Parrikar said: "The government has decided to implement the OROP."

Saying that the OROP issue has been pending for nearly four decades, Parrikar said to implement OROP, the estimated cost to the exchequer would be Rs 8,000 crore-Rs 10,000 crore at present, and will increase further in future. He added that the previous government had set aside a sum of Rs 500 crores for OROP, but it was "not based on a thorough analysis". The expenditure on arrears alone will be around Rs 10,000 crores to Rs 12,000 crores.

The government has held extensive consultations with experts and ex-servicemen on the issue, said Parrikar, adding that the OROP implies that uniform pension be paid to the Armed Forces personnel retiring in the same rank with the same length of service, regardless of their date of retirement.

The minister that the government has decided that the gap between rate of pension of current pensioners and past pensioners will be bridged every five years.

He further announced that the OROP will be implemented from July 1, 2014 and the base year would be 2013.

Arrears will be paid in four half-yearly instalments. All widows, including war widows, will be paid arrears in one instalment, he added.

Pension will be re-fixed for all pensioners retiring in the same rank and same length of service as the average of minimum and maximum pension in 2013, announced Parrikar.

The minister also cleared that personnel who voluntary retire will not be covered under OROP scheme.

Top Defence Ministry sources said interest of those armed forces personnel who had to take VRS due to injuries will be protected.

"OROP is a complex issue. A thorough examination of interests of retirees of different periods and different ranks is needed. The inter-service issues of the three forces also require consideration. This is not an administrative matter alone," said Parrikar

In future, the pension would be re-fixed every five years, added the minister.

Parrikar made the announcement in the presence of Army Chief General Dalbir Singh, Naval Chief Admiral RK Dhowan, Air Force Chief, Air Chief Marshal Aroop Raha, and Defence Secretary G Mohan Kumar.

Responding to Parrikar's statement, Major Gen (Retd) Satbir Singh, who is leading the campaign, said while the veterans were satisfied with the government's intention to implement the OROP, they made it clear that the proposed benefits were not acceptable to them.

He said they disapprove of setting up of one-member judicial committee. “It should be under the Defence Minister and not given more than one month.”

He said that the veterans wanted clarifications from the government on issues like pre-mature retirement benefits and averaging of pension.